6.  The particulars of the applicants appear in Appendix 1.
7.  After 1948, when the communist regime had been installed in the former Czechoslovakia, the housing policy was based on a doctrine aimed at the restriction and abolition of private ownership.
8.  Some residential houses were confiscated and some owners of residential houses were compelled to transfer their property to the State for no or inadequate compensation. Those owners who were not formally deprived of the ownership of their residential housing were subjected to restrictions in the exercise of their property rights.
9.  As regards flats in residential houses, tenancies were replaced by the “right of lasting use”.
10.  The Flats Management Act 1964, which was in force until 1 January 1992, entitled public authorities to decide on the right of use of flats. Special regulations governed the sums which the users had to pay. On 1 January 1992 “the right of lasting use” was transformed into a tenancy with regulated rent.
11.  After 1991 some residential houses were restored to their former owners; however, flats in these houses were mostly occupied by tenants with regulated rent.
12.  Under the relevant law (for details see “Relevant domestic law and practice” below), owners of residential houses in a position similar to that of the applicants in the present case have been obliged to accept that all or some of their flats are occupied by tenants while charging no more than the maximum amount of rent fixed by the State (“the rent-control scheme”). Despite repeated increases in the maximum rent which the domestic law entitles house owners in this position to charge, that amount has remained below the level of rent chargeable for similar housing let on the principles of a free-market economy.
13.  In situations similar to that of the applicants, the owners of residential houses had practically no means of terminating tenancies and evicting tenants without providing them with “housing compensation”. Furthermore, owners were not allowed to transfer ownership of a flat rented by an individual to any third person other than the tenant.
14.  The Government of the Slovak Republic have dealt with the issue of rent control on several occasions as indicated below.
15.  Documents of the Ministry of Construction and Regional Development indicate that, by 20 January 2009, registration forms had been submitted by tenants in respect of 923 flats where rent control was applied. 2,311 persons lived in those flats, the average surface area of which was 71.38 square metres. The documents indicate that it was envisaged that substitute accommodation would be made available to the persons concerned by the planned reform so long as this was justified by their social situation. 76.5% of the tenants thus registered lived in flats located in Bratislava.
16.  On the basis of those data, the authorities estimated that the rent‑control scheme concerned approximately 1,000 flats, that is, 0.24% of rented flats in houses that existed in 1991 and 0.06% of the inhabited housing facilities which were available in Slovakia in 2001.
17.  The applicants are owners or co-owners of residential buildings in Bratislava and Trnava to which the rent-control scheme applies, or has applied, (further details are set out in Appendix 2). They obtained the ownership of the flats by various means, such as restitution, donation or inheritance from their relatives to whom the flats had been restored in the early 1990s. In two cases the applicants purchased further shares of ownership from the other co-owner, the Bratislava Municipality. Mr Dobšovič and Ms Dobšovičová (applicants listed in points 6 and 7 of Appendix 1) purchased the flats from individuals in 2005. The majority of the other applicants acquired ownership in the course of the 1990s.
In the meantime, the rent-control scheme has ceased to be applicable to several of the flats concerned.
18.  The applicants maintained that the rent to which they are, or were, entitled for letting their property is far below the maintenance costs for their houses and disproportionately low compared with similar flats to which the rent-control scheme does not apply.
19.  The parties submitted the following information as regards the impact of the rent-control scheme on the applicants.
20.  Initially, and by way of example, the applicants pointed out that the controlled rent in respect of a flat with a surface area of 72.56 square metres was 71.50 euros (EUR) per month, which corresponds to EUR 0.99 per square metre. However, the monthly free-market rent in respect of such a flat was approximately EUR 830, that is EUR 11.40 per square metre.
21.  The applicants further relied on the opinion of an expert provided at their request on 19 July 2010. It set out the difference between the free‑ market rent and the controlled rent in respect of a residential house located at Trenčianska St. in Bratislava-Nivy for the period from 1993 to 2010 (for further details see Appendix 3).
22.  Following the Court’s decision to declare the application admissible, the applicants submitted voluminous opinions of experts concerning their properties.
23.  The opinion of expert I. no. 51/2012 of 26 April 2012, which the applicants relied on by way of example, concerns a residential house where rent control applied to five out of the eight flats. It was situated on Tallerova St. in Bratislava – in the Staré Mesto district – and several applicants are co‑owners of the flats concerned (see also Appendix 4). The opinion indicated that the relevant legislation allowed for regulated rent which corresponded, on average, to 0.69% of the acquisition value of a flat in 1994. That ratio was 0.79% in 2001 and 1.96% in 2011.
24.  According to expert opinion no. 51/2012, the regulated rent amounted to 2.2% of the free-market rent in 1993. In 2002 it corresponded, on average, to 4.5% of the free-market rent, and in 2011 the average regulated rent corresponded to 14.3% of the free-market rent. The applicants submitted that the other opinions concerning their properties were in line with that conclusion. The above opinion contains the following valuation of the flats concerned for the period from 1 January to 31 March 2012:
 
Flat
no.
 
Monthly market
 rent EUR/m2
 
Monthly controlled
rent EUR/m2
 
Percentage controlled/
market rent
 
1
25.  As regards the maintenance costs of their properties, the applicants submitted that most of them did not have sufficient means to ensure renovation and maintenance of the houses because of low incomes under the rent-control scheme. They relied on the expert opinions which determined the “cost-based rent” in respect of the houses owned by them, namely, the rent calculated on the basis of the current technical value of the buildings and on the costs necessary for their ordinary and adequate periodic maintenance, while taking into account the gradual wear and tear of the buildings. Thus according to expert opinion no. 51/2012, the regulated rent amounted to 3.3% of the “cost-based rent” in 1993. In 2002 it corresponded, on average, to 5.3% of the “cost-based rent”, and in 2011 the average regulated rent corresponded to 26.4% of the “cost-based rent”.
26.  With reference to the experts’ conclusions, the applicants maintained that they had suffered pecuniary damage on account of the application of the rent-control scheme to their property. This was determined as the difference between the free-market rent applicable to similar dwellings and the controlled rent which the applicants were allowed to charge throughout the period of ownership and application of the rent-control scheme. The damage which the individual applicants claimed to have suffered is specified in Appendix 5.
27.  The Government initially submitted the opinion of a different expert, drawn up in 2010, according to which the average free-market monthly rent for flats comparable to those of the applicants in the municipality of Bratislava-Staré Mesto was between EUR 6.13 and 6.48 per square metre. In the broader centre of Trnava the free-market rent was between EUR 3.37 and EUR 3.87 per square metre at that time.
28.  In response to the detailed expert opinions submitted by the applicants, the Government first submitted an opinion by the Forensic Engineering Institute in Žilina. It pointed to errors in several of the expert opinions, challenged the methods applied by the experts and their standing to determine the amount of profit lost by the applicants. The view was expressed that direct comparison with dwellings where the rent-control scheme did not apply was the most appropriate method for determining the damage suffered by the applicants.
29.  Subsequently, the Government submitted an opinion drawn up by the Forensic Engineering Institute in Žilina on 15 November 2012. It indicated that lack of statistical data for the overall period of rent control prevented the flat owners’ lost profit from being determined in an objective manner. In order to establish appropriate compensation for the applicants, it was therefore appropriate to use a methodology similar to determination of compensation for tolerating an easement over the property. Among other data, the opinion indicated that, under the regulation in force between 1964 and the end of June 1992, the rent in respect of a three-room flat corresponded to EUR 0.08 per square metre. As from 1 July 1992 a 100% increase was applied.
30.  By means of comparison, the opinion established that, in 2012, the monthly market rental value of flats in Bratislava varied between EUR 4.71 and EUR 5.97 per square metre depending on the location, number of rooms and equipment. It amounted to EUR 4.51/4.52 in respect of one/two-room flats in Trnava.
At the same time, the rental value of the applicants’ flats under the rent‑control scheme was between EUR 1.20 and 1.60 in most cases, the extreme and exceptional values being EUR 0.45 and EUR 2.21 in Bratislava. In Trnava the controlled rent of the applicants’ flats varied between EUR 1.24 and EUR 1.60 in 2012. In determining the rental value of the applicants’ flats in 2012 a 40% increase was applied (as provided for by Law no. 260/2011 in 2011 and 2012).
The relevant data are set out in Appendix 4 (columns A – F).
31.  According to the expert opinion, appropriate compensation payable to the applicants should be calculated as the difference between the net monthly income (profit) which they were able to obtain for renting their flats under the rent-control scheme and the net monthly income (profit) which could be drawn from letting comparable flats at the market price. The calculation is based on (i) the technical value of the flats in 2012, (ii) their rental value (both on the free market and under the rent-control scheme) in 2012; (iii) duration of application of the rent-control scheme; (iv) the ownership share of individual applicants; and (v) the marginal interest rate of the European Central Bank.
The amounts of compensation to which the individual applicants are entitled in accordance with the above method of calculation for the period covered by the opinion are set out in Appendix 4 (column G).